Investing.com – Crude prices jumped almost 2% on Wednesday as an arctic freeze in Texas posed uncertainty on how long it would be before output resumed as normal in the largest U.S. oil producing state, which was also left without power after the worst snowstorm in three decades.
New York-traded settled up $1.09, or 1.8%, at $61.14 per barrel. It earlier hit a session peak of $61.27.81, its highest since January 2020. WTI has risen more than 26% year-to-date.
London-traded , the global benchmark for crude, settled up 99 cents, or 1.6%, at $64.34, after setting a 13-month high of $64.74. Brent is up almost 25% on the year.
Oil’s rally this year has been sparked and sustained by a combination of factors.
It began with the November breakthrough in vaccines for the Covid-19. That was followed by OPEC leader Saudi Arabia’s announcement of deeper production cuts in January.
From then, commodity-index linked buying of oil, sizable weekly drops in U.S. crude stockpiles and hopes for economic stimulus from the Biden administration spurred gains.
This week, the snowstorm that blanketed the typically sweltering heart of U.S. oil country — Texas — has continued to shore up the market’s strong base.
ANZ and Citigroup (NYSE:) analysts estimated at least 2 million barrels per day (bpd) of U.S. shale oil production had been curtailed by the Texas storm.
Citi estimated a cumulative production loss of around 16 million barrels through early March.
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